The Free Agency Phenomenon

THE FREE AGENCY PHENOMENON THE BASEBALL ANALOGY G. Edward White† N HIS RECENT BIOGRAPHY OF CURT FLOOD, the baseball player who in 1972 unsuccessfully challenged major league baseball’s “reserve clause” practice as a violation of the antitrust laws, Brad Snyder portrays Flood as the catalyst for the onset of free Iagency in baseball. And Snyder goes further. These days, he says, free agency describes the working life of Americans generally. “The days when people worked for the same company or even in the same occupation for their entire lives,” Snyder claims, “are long gone.” People are always on the lookout for a better job or a better deal. “We may not want to admit it, but there’s a little Curt Flood in all of us. If baseball is an analogy for life, then we have become a society of free agents.”1 The Supreme Court’s decision in Flood’s case2 left the reserve clause practice intact, which meant that clubs continued to reserve † G. Edward White is David and Mary Harrison Distinguished Professor of Law at the University of Virginia School of Law. 1 Brad Snyder, A Well-Paid Slave 350 (2006) (quoting Loren Steffy). 2 Flood v. Kuhn, 407 U.S. 258 (1972). 10 GREEN BAG 2D 347 G. Edward White the right to renew all their players’ service contracts, on terms to be determined, for a year after the players’ current contracts expired. No other clubs would bid for the players, so if a player was dissatis- fied with his situation his only options were to negotiate with the club (with limited leverage), retire, or sit out of baseball for a year. The reserve clause, coupled with the refusal of teams to bid for other teams’ players, was an obvious illustration of a conspiracy to restrain competition in the market for major league baseball players’ salaries. Neither the Supreme Court nor Congress, over a fifty- year period beginning in the 1920s, chose to do anything about that situation. But in 1975 everything changed. The baseball players’ union, which in 1970 had won the right to refer player grievances to bind- ing arbitration, encouraged two players who had been traded without their consent to challenge the reserve clause before Peter Seitz, a designated arbitrator. Seitz construed the clause so narrowly as to invalidate it for all practical purposes, and a year later a new agreement between the players and club owners instituted free agency in baseball. Snyder’s book on Flood is mainly about Flood’s life and career, both before and after his challenge to the reserve clause. Flood was 31 when, in 1969, he refused to accept a trade from the St. Louis Cardinals to the Philadelphia Phillies, setting off a chain of events that led to his retiring from baseball before the Court’s decision, moving to Denmark, fighting alcoholism, becoming temporarily bankrupt, and dying from throat cancer before his 60th birthday. It is only at the very end, almost as a throwaway line, that Snyder sug- gests we have become a society of free agents. But it is an intriguing thought: Has free agency migrated from its origins in professional sports to become a contemporary cultural phenomenon? One might argue that baseball, at least in the major leagues, is not a very good analogy for life. Major league baseball players are persons so accomplished at a particular sport that members of the public are willing to pay money to watch them display their skills. In the 1922 Federal Baseball case, which held that major league baseball was not subject to federal antitrust laws, Justice Holmes re- 348 10 GREEN BAG 2D The Free Agency Phenomenon ferred to baseball games as “exhibitions,”3 a term that might seem quaint to dedicated contemporary baseball aficionados. But a major league baseball game is in essence an “exhibition,” a form of entertainment in which spectators pay to watch players perform athletic feats at levels well beyond the reach of the average person. Ordinary working life does not seem analogous. Members of the public, with very few exceptions, do not possess the gifts and have not developed the skills to make a living by performing before audi- ences for pay. The only analogous persons in the population would seem to be entertainers, suggesting that it is no accident that the worlds of professional sports and entertainment are so commonly linked. Numerous other successful people in business and the pro- fessions owe their success to a particular skill set for which there is a demand in some market, but that skill set is not usually related to physical abilities, and it is typically not “performed” in an “exhibition.” So the claim that playing major league baseball furnishes an analogy for the working life of most Americans has difficulties. But it still seems possible to posit a connection between the emergence of the free agency phenomenon in baseball and in other sectors of the American workplace. That connection flows from the fact that major league baseball in America is a cultural institution, embodying social attitudes and values and responding to changes in those attitudes and values. Moreover, when one explores the cultural dimen- sions of free agency in baseball, a history of the 20th-century baseball workplace surfaces, in which free agency represents a late- century transformative event. Free agency, in that history, can be seen not as an isolated, accidental phenomenon, the result of some bungling by major league baseball owners in the aftermath of the Flood case, but as a culturally inevitable development, one that emerged in major league baseball because its time had come. The same might be said of free agency as a general phenomenon in American working life. 3 Federal Baseball Club of Baltimore v. National League of Professional Baseball Clubs, 259 U.S. 200, 208 (1922). SPRING 2007 349 G. Edward White HI n 1951, a subcommittee of the House Judiciary Committee held I extensive hearings on “monopoly power” in Organized Baseball, the entity concerned with the operations of the major and minor leagues.4 The hearings came at a time when some of baseball’s tradi- tional practices had come to be perceived as conspicuously mo- nopsonistic.5 The most obvious example was the reserve clause, whose antitrust implications were accentuated by the fact that all the major league clubs sold radio and television rights to their games, which were carried on networks and stations operating in interstate commerce. But there were others. The “territoriality” principle, which had governed the conduct of major league franchises since 1903, stipulated that each club could prevent any competitive franchise from operating within its “terri- tory” – defined by the major league club owners – without its consent. That principle was subsequently interpreted as giving owners control over the prospective transfer of clubs from one location to another, as well as over the prospective expansion of the major leagues to include teams from new cities. Both measures required the unanimous, or nearly unanimous, consent of all owners. The result was that the franchise map of major league baseball remained constant for five decades. In 1951 New York (counting Brooklyn) had three teams, Boston, Philadelphia, Chicago, and St. Louis two, and Washington, Pittsburgh, Cleveland, Detroit, and Cincinnati one each. This was the identical allocation of franchises made in the original 1903 National Agreement between the two “Major Leagues,” the National and the American. 4 For more detail on the hearings, see G. Edward White, Creating The National Pastime 301-06 (1996). 5 A monopsony is a “buyer’s monopoly,” in which the absence of competition among those buying goods or services results in prices being artificially depressed. This was the effect of the reserve clause. Because teams would not compete with one another to buy players in an open market, a player could not command a salary any higher than the one his current club was prepared to offer. 350 10 GREEN BAG 2D The Free Agency Phenomenon But by 1951 several cities, such as Atlanta, Dallas, Denver, Min- neapolis/St. Paul, and especially Los Angeles and San Francisco, had populations exceeding those of some of the original franchise hosts. Moreover, between the 1930s and the 1950s some clubs in “two team” cities, such as the Boston Braves, Philadelphia Phillies, and St. Louis Browns, had quite poor attendance records and were consis- tently low in the pennant race standings. Those franchises were not profitable, and their ballparks, built before the 1920s, were deterio- rating. In contrast, cities such as Kansas City, Los Angeles, San Francisco, and Minneapolis had thriving minor league franchises, especially after the end of World War II. Nevertheless, major league baseball owners rebuffed efforts to transfer weak “two team” franchises to other cities and took no steps toward expansion. A final practice that came to the subcommittee’s attention was the “farm system,” the term describing efforts by major league franchises to control the future disposition of players on the rosters of minor league clubs by having exclusive agreements with those clubs or owning them outright. The system was a response to the haphaz- ard fashion in which players were recruited and developed by the major league franchises in the years after the signing of the National Agreement in 1903. Most major league players came from the rosters of minor league franchises, which were initially independent entities. A classification of minor leagues, based on the ability of the players, had been put in place by the major league clubs in 1911, and compensation levels for players “drafted” from minor league rosters had been fixed.

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